Archive for the ‘forecasts’ Category

When business picks up particularly after challenging periods like our recent recession, it’s easy to overlook basic financials. It’s even easier to overlook less obvious financials like the Sustainable Growth Rate. The SGR calculates the rate of growth your business is able to sustain without additional borrowing. It essentially answers the question, “How fast can I afford to grow in my current state?” A simple look in the App Store will reveal an SGR calculator for less than a dollar. Check out the interesting discussion at the Harvard Business Review Blog here.

Find the Sustainable Growth Rate Calculator here for 99 cents.

The WSJ/Vistage Small Business CEO Confidence Index was 91.7 in July—down from 100, which was the baseline set in June.

Below are some key highlights from the July WSJ/Vistage Small Business CEO Survey:

• 28% of CEOs say current economic conditions have improved compared to a year ago, down from 37% in June.
• 62% of CEOs expect their firm’s revenues to improve during the next 12 months, down from 67% in June.
• 46% of CEOs expect their firm’s profitability to improve during the next 12 months, down slightly from 51% in June.
• 46% of CEOs expect their firms number of employees to increase during the next 12 months, down from 54% in June.
• 36% of CEOs say that they are holding back on hiring because of economic uncertainty.
• 31% of CEOs say they are unable to find applicants with relevant skills for their unfilled jobs.
• 39% of CEOs believe job openings are holding them back from growth or expansion.
• 36% of CEOs offer training to help prospective employees develop the required skills for their unfilled jobs.

Click here to read the Wall Street Journal article about the survey results.

Also check out the related video about small businesses struggling to close the skills gap.

This month’s issue of Wired Magazine offers seven suggestions.

1. Look for Cross Pollinators
2. Surf the Exponentials
3. Favor the Liberators
4. Give Points for Audacity
5. Bank on Openness
6. Demand Deep Design
7. Spend Time with Time Wasters

Read the  full article here.

Peer-advisory groups discuss some of the tough issues that your business faces every day, such as investments, uncertainties, moral conflicts and accountability.

On this week’s episode of The CEO TV Show, Rafael Pastor, CEO of Vistage International, discusses peer-advisory groups and the CEO’s role. Rafael explains peer-advisory groups: putting executives together into a group that meets for 8 hours every month. No one can be in the group who is the same business as another group member to avoid competitiveness. And whatever is said in the room, stays in the room.

Peer advisory groups talk about things that they don’t talk about anywhere else, professional or personal. Accountability is a big part of the group. Group members will follow up at the next meeting and the chair of the meetings will visit your office for a one to one coaching session.

Rafael also mentions that the group members usually either don’t know what they should do, or want an opinion on a decision they’ve made in their mind. An advantage to having executives from very different industries is that it allows a fresh perspective that they might not be able to get within their own industry.

The breath of experience and the willingness to look at an issue in an entirely different way is very effective. Pastor says this system works for two reasons: A CEO’s most valuable commodity is their time and yet they return time and time again so they must be getting something out of it. Second, they have quantitative results. They have conducted studies that show an improvement in growth rate from before to after an executive joins the group.

Find out more about Vistage International and how they can help your business in this week’s episode of The CEO TV Show.

The Vistage CEO Confidence Index was 105.1 in the 1st quarter 2012 survey, up from 98.8 in Q4 and 83.5 in Q3 of last year.

Below are some key highlights from the Q1 Vistage CEO Confidence Index:

• 75% of CEOs say their sales revenue will increase in the next 12 months.
• 60% of CEOs expect their firm’s profitability to improve during the next 12 months.
• 59% of CEOs believe recent data showing economic improvement signals a longer-term trend toward economic growth.
• 60% of CEOs believe that overall economic conditions in the U.S. have improved compared to a year ago.
• 84% of CEOs have learned to make their business more productive with fewer employees.
• 57% of CEOs expect their total number of employees will increase in the next 12 months.
• 30% of CEOs said that if they could start their business over again, they would chose to open it in another state.

For more information, check out the full presentation here.

Houle calls 2010-2020 the “Transformation Decade,” during which businesses will need to leave 20th century business principles behind and adapt to the changing global economy or risk becoming less competitive.

According to Houle, qualities business leaders need to have during the Transformation Decade:

1. Adaptability: Business owners need to consistently redefine their markets and adjust products and services in order to reach the most consumers.

2. Collaborative ongoing reorganization: Decisions should be addressed by management as a whole instead of by an individual, and innovative employees should be utilized to ensure that your business is consistently evolving.

3. Vision: Set goals as a leader, and then do what is necessary to reach those goals.

With so much data becoming available, businesses will be better able to predict consumer-buying patterns and structure their companies accordingly.  Technology will begin shifting to “brain wave interface,” which will allow users wearing specialized headsets that map brain waves to control actions on their computers.

Advancements in medical technology will enable people to live longer, and as the U.S. continues to morph into the world’s leading producer of intellectual property, Americans will be physically able to work well above the current retirement age. Also, as the percentage of college-educated women as well as those pursuing master’s degrees and PhDs in most developed countries has increased to levels above men, more companies will be run by women.

Houle believes the fundamentals that will shape change over the next 15 years are as follows:

The Flow to Global: Economics have gone from micro to macro, and most of the challenges businesses face are on a global scale.

The Flow to the Individual: With such a vast and growing variety of choices of all the products and services that people use the power has shifted “from the producer to the consumer.”

Accelerated Connectedness: Technological advances in communication such as mobile phones and the Internet have broken down the limiting factors of time, distance and place, which have traditionally hindered both personal and business connections.

As the need to stay connected at all times in all places has increased, so has the popularity of smart phones. 2012 will mark the first year ever that smart phones will outsell computers, and this trend is only the beginning. As computing shifts more to mobile, business owners should address this market accordingly.

Currently, about 3 billion people around the world use the Internet, and by 2025 that number will double, and the amount of data will increase exponentially. The widespread use of social media has given consumers both a “physical reality” and a “screen reality,” which is an identity that has been established online. Social media enables people to voice their opinions for all Internet users to view, so businesses should focus on social media marketing as it can reach more people than traditional word-of-mouth marketing.

Internet content is evolving, and an expected 90% of the Internet backbone in the world will be video in 2015. Houle suggests that companies should have video on their sites, specifically, testimonials from customers.

“2012 is going to be a recovery year … and it’s going be a year of economic expansion in the U.S.,” states Alan Beaulieu, the CEO of the Institute for Trend Research (ITR). Alan and brother Brian Beaulieu, the President of ITR, gave a positive outlook on America’s economy from 2012-2013 during a Dec. 16 Fridays with Vistage webinar.

The respected economists base their upbeat view of the economy on several factors including:

• Positive rates of change in global industrial production, retail sales, commercial and industrial loans at commercial banks
• Improving employment numbers
• Decreasing rates of change in delinquency rates for commercial and industrial loans
• Some upticks in housing starts and the Purchasing Managers Index

Trends indicate the economy will continue to improve through the first half of 2013 with the second half slowing down due to probable tax increases enacted in the beginning of the year. They predict a possible recession in 2014 but not nearly as dramatic as the one experienced in 2008. Although, several factors that could escalate it are the financial turmoil in Europe, tax increases, a rise in interest rates and a possible increase in a particular commodity price such as gasoline.

Businesses should take advantage of the positive climate in 2012-2013 but need to be mindful of 2014, the economists shared. Regarding preparation for 2014, Alan suggests that businesses should “grow market share . . . make sure you have enough cash and make sure your credit lines are where they ought to be.” They warn that producer price pressures due to inflation and increased demand could cause your cost of production to go up through 2013 but those costs can eventually be passed on to customers. Also, they say to be mindful of setting your price points too high going into 2014.

Alan and Brian encourage what they term as “make your move” items, which are those things a business needs to act on in order to stay competitive in a changing environment. As a result of an improving economy, the “make your move” items that a business owner should focus on are capacity constraints such as understaffing or inadequate training. Any constraints that a company is facing at the current level of business will be compounded moving forward as demand for products and/or services increases. Failure to address problems could result in delays to customers and the risk of losing market share to competitors.

Other factors business owners should concentrate on include: “positive leadership modeling,” “hire ‘top’ people,” “invest in customer market research,” “judiciously expand credit to your customers,” and “review and uncover competitive advantages.”

In regards to Europe’s current financial turmoil, Alan says that he’s “reasonably confident” that liquidity freeze-up will be avoided thus allowing a soft landing over the next couple of months. However, there is a potential that “unreasonableness fueled by fear and rumor” could invoke mass withdrawals at banks resulting in markets turning downward quickly.

Although they expect continued weakness in Europe for the first two quarters of 2012, the economists predict some rebound in the second half of the year. Also, the media’s attention has been focused on the financial weaknesses in Europe rather than the current strengths occurring in the U.S. and elsewhere in the world.

From Vistage Village, Thanks to Editor Paul Diamond

Introduction

“Business as usual” is undergoing a transformation brought on by changing consumer tastes and dramatic economic pressures. Companies now have to find new ways to appeal to consumers scarred by the economic crisis of 2008-2009. These consumers spend less and save more; many are jobless, many lack trust in businesses, and many expect the government to provide a high level of service.

Business operations are under numerous other pressures, including constrained credit, economic uncertainty, threat of increased inflation, low dollar valuation, excessive consolidation in many industries, the rapid pace of innovation, rising commodity prices and a constant pressure to do things better, faster and cheaper.

The good news is: business is reorganizing and finding its way forward. To help you ensure the future of your business, we offer 12 trends that span the range from new consumer attitudes and emerging disruptive technologies to the latest marketing and business operation practices.

Think of these trends as opportunities you can seize to give your customers more of what they want.

Consumer Trends

Trend 1: Short-Termism

The financial crisis that brought us to the brink of monetary end-times made consumers realize that governments, institutions and even brands don’t have a good sense of the future—and they certainly can’t control a quickly developing crisis. Consumers have become fearful of what might happen next, and they no longer trust that enterprises operate towards a stable, long-term future.

“People are thinking more about the here and now, and less about things that may or may not last a long time,” says noted trend analyst William Higham, author of The Next Big Thing—Spotting & Forecasting Consumer Trends for Profit .

“This sentiment leads us to buy based on our immediate needs. It also makes us want to take greater responsibility for ourselves across a range of sectors, rather than relying on media, politicians, professionals or brands, who we feel have let us down. For example, we are increasingly self-diagnosing and self-treating; scheduling media at the times we want; and making our own playlists rather than buying new compilation albums.”

Additionally, people now understand that the pace of innovation rapidly outdates expensive technology purchases. The relative usefulness of smart phones, navigation systems, laptops, software, and televisions lasts no more than a year, sometime only months. When it comes to new technology purchases, consumers have learned to adopt a “wait-and-see” attitude.

Trend 2: Brand Aid

Companies are now building brand loyalty by helping their consumers navigate through today’s complexities and difficulties.

“These brands want to be seen as helping consumers through life,” said Higham.

Brand aid typically takes the form of advice, information or free services provided to the public. Examples include:

•      Microsoft: Publishes a free online magazine, Home, offering unbiased Internet guidance

•      Charmin: Offers free public restrooms for shoppers in New York’s Times Square during the holiday season

•      Evy Baby: This diaper company places branded changing rooms in Turkish

shopping malls

•      American Express: Created openforum.com to help business owners find success

Higham thinks the trend will expand to an entirely new aid market: “Tomorrow’s consumers will pay a premium for brands that help them avoid activities that are either difficult, time consuming or unpleasant. This will be a particularly strong driver in the luxury sector, as definitions of luxury evolve from ostentation to experience and more recently convenience and privilege.”

Trend 3: Conscious Consumerism

You know those people who buy something only if it’s organic, eco-friendly or made locally? Soon most of us will make our purchases based on such highly selective, specific criteria.

“Companies should think about their consumers in terms of what, why and how they purchase,” says Higham. Impulse buying is waning, giving way to purchases that are driven by enduring core values. “With less money to spend, there will be a reduction in impulse purchasing and a growth in conscious consumption: where individuals limit purchases to products that matter to them. Brands will increasingly need to provide a meaningful reason for consumers to buy their products: from strong aesthetics to durability, heritage to sustainability. And they will need to target their products more specifically to particular attitudinal and needs segments.”

Trend 4: Simplification

One of the key trends of the 2000s was the growth of choice. But a backlash has begun, as more and more consumers suffer choice fatigue. “Consumers will increasingly seek, not unlimited choice, but an edited choice,” says Higham.

Simplification creates three distinct marketplace opportunities for nimble companies, including:

• Recommendation as a service: Recommendations and shortlists of options that give us the right choice rather than an abundance of choices will become increasingly popular. Additionally, products that reduce the need to make a choice will benefit from this trend.

• Single-occasion products: Certain single-occasion products such as birthday cakes, wedding gowns and event insurance have long been with us. Now companies are elevating daily activities into occasions that pair with their products. “You can buy bottles of wine made to be drunk with specific dishes like fish or chicken; or coffee brands that are made to be drunk at specific times of the day.” This pairing serves to simplify choice.

• Multi-use products: “If you own a single device that acts as phone, camera and music player, you don’t need to decide which of several single-use products to take with you when going out.” Multi-use products are marginalizing certain types of single-use products.

Trend 5: Mobile Purchasing

Cell phones are becoming virtual credit cards and mobile credit-card processing terminals. In Japan and Sweden, consumers have long been using cell phones to make purchases. “Mobile purchasing answers a real need in marketing—closing the deal conveniently,” says Philippe Cesson, Vistage speaker and president of Cesson 3.0 , a social media and training company.

“Just as customers embraced online shopping for its convenience, they will also embrace mobile purchasing.” The U.S. has been slow to adopt the technology, but currently has four forms of mobile phone transaction in use, and these may become widely adopted, though who knows which technology will ultimately prevail. The four models for cell-phone transactions are:

• Swipe your phone: Customers can securely swipe their cell phone and use it just like a credit card, making for a quicker transaction. Businesses can use this technology to gain more sales and increased conversion. One provider, BlingNation , is spreading this technology via community banks, which provide local merchants with a phone-swipe terminal and checking-account customers with a small adhesive tag that sticks to the back of their phone. Swipe the tag over the terminal to make a purchase. The transactions are processed directly by a local bank which results in lower fees than merchants normally pay for credit card transactions. This system is currently being tested in two Colorado towns. It appears to be work well for high-volume, lowprice purchases.

• Accept payments with your phone: You can now buy a small card reader made by SquareUp that hooks to your iPhone, Android or Blackberry. When a customer wants to buy something from you, they simply swipe their credit card through this gadget connected to your phone, then they sign their name on your phone, and the transaction is complete. You can also email a receipt to the buyer. This solution works well for traditional businesses that want to sell items off-location at trade shows or festivals, and for consultants, one-person businesses, or artisans who want to accept payment by credit card but either can’t get a merchant account or don’t want one because of the fees. With this service you don’t need a merchant account and there are no contracts or monthly fees. The cost per transaction hasn’t been disclosed yet.

This service, which aims to be available in Q2 2010, is brought to you by the people who invented Twitter—expect it to be highly disruptive to traditional merchant accounts.

• Enter your phone number online: Customers shopping online can enter their cell phone number to check out and pay. They must reply to a text message sent by the site to complete the transaction. The customer then pays the charge on their monthly cell phone bill. Using a cell phone number is a lot quicker and easier than entering credit card and address info online, and it appeals to younger people and those who may not have a credit card. What’s the rub? The transaction fee is painful—as a merchant you must give 35 to 50 percent of the sale price to the mobile carrier that processes the transaction. These fees may drop in time.

• Transfer money via cell phone: You can now transfer cash via text message. Both the sender and recipient need to register for a free account with a provider such as

Obopay.com ; once that’s set up, sending money costs 25–50 cents per transaction, and the money can go directly from and to bank accounts. For small business owners it’s an easy, inexpensive way to send or collect payment overseas. Wave goodbye to the fees, long forms and bank visits associated with wiring money.

These nascent mobile commerce platforms will likely battle it out, VHS-vs-Betamax style, while most of us will be on the sidelines with a wait-and-see attitude. Forward-thinking companies should dive in now, even if they risk adopting a platform that goes the way of Betamax.

“Payment by cell phone empowers merchants to conduct business everywhere and at anytime,” says Cesson. “One consequence of this technology is that it opens up every social interaction to potentially become a sales interaction.”

 

Marketing Trends

Trend 6: Emotional Branding

“Companies will increasingly base their brand on emotion, to avoid basing it strictly on price,” says futurist and Vistage speaker David Houle . “Brands with strong emotional content will command the highest prices.”

Most successful brands establish a deep emotional connection with their customers, says Vistage speaker Ronald Strauss, author of Value Creation: The Power of Brand Equity . Smaller businesses, he says, think of their brand only in terms of marketing collateral, logos, letterhead, and colors. Many CEOs are not yet tuned in to the emotional aspects of branding.

“Giving your brand emotional content is not easy,” says Strauss. “You must first learn to think of your brand as an organizing lens for how you run your business. You then have to understand how your stakeholders look at your brand and how you create or destroy value as your business delivers, or fails to deliver, on its brand promise.”

Strauss offers these tips for small businesses to build an emotional-based brand:

•      Acknowledge and recognize your customers. Have an ongoing relationship or loyalty program with your best customers. The program should make them want to tell their friends about what you do for them.

•      Figure out how to best serve your customers by studying what they do to serve their customers. Help them serve their customers better.

•      Infuse your brand with values that drive your products or services. People want to feel part of something bigger than themselves, and values such as quality, creativity, luxury, respect and integrity achieve this.

•      At every touch your customer has with your company, treat them consistently well. This makes them feel important.

•      Create satisfying experiences for your customers. People value sensory, pleasurable, intellectual, safe and consistent experiences. For products, these attributes are often achieved with packaging and design. For services, they are achieved by building trust, which comes from consistency of treatment.

The most common failure of brand to resonate emotionally, says Strauss, is when customers perceive indifference.

Trend 7: Reputation Management

Just as you have to keep your credit score in good standing to own a credit card, you’ll soon have to keep you online reputation in good standing if you want to be trusted or have influence online.

“Reputation measurement will become a massive economic enabler as we get better at assessing it,” says futurist Ross Dawson, who authors the Trends in the Living Networks blog.

Already, within certain domains, user reputations are displayed. eBay displays a

“reliability ranking” for each seller based on how much positive feedback they get from buyers, and “Ask Vistage” displays a bar above each user’s name that shows how much they participate.

A few sites, such as klout.com, attempt to score reputations. But none yet has cracked the code of offering a comprehensive reputation score.

“Assessing a business’s online reputation is becoming more sophisticated,” says Dawson. “Soon we’ll be able to create measures that tell how trustworthy and knowledgeable a person or business is based on their online networks, as well as positive or negative reviews, information they share, how that information is ranked and which sites link to it.”

Look for reputation management to become as important to driving business online as search engine optimization is now.  For small business owners, you should start building your reputation and your business’s reputation now. According to Dawson, here’s what you can do to start:

• Find out what’s being said about you now. There are many free tools to discover this.

• Participate in social media so that you become more visible and have a “right of reply.”

• Ask those who genuinely like what you do to recommend you or your work on online sites.

• Don’t do anything online you wouldn’t want people to find out about—because they will.

Start building your reputation early to get ahead of the trend.

Trend 8: Behavioral Segmentation

Segmenting your customers by demographics will soon be an antiquated practice. Smart companies are building robust profiles of individual customers.

You can create such profiles based on what your customers do on your website—what content they view, what offers they respond to, what they buy, what information they enter during registration, which emails they respond to, and any other data you can collect on them. Once you build a profile of your prospect or customer, you can use the information to predict what offers and content they are likely to respond to and thereby increase your sales conversion rates.

“Behavioral segmentation is a more sophisticated way to segment your customer than traditional demographics,” says Dr. On Amir , Assistant Professor of Marketing at UCSD’s Rady School of Management. An expert in consumer decision-making, Dr. Amir says that many companies don’t have the internal knowledge to build websites that track behavior and present the most compelling offer to users based on their profile.

“The actual back-end programming is easier than figuring out what you want your program to do,” he says. “The challenge is with the goals, not the programming.”

One cornerstone of successful profiling is determining how different users respond to different offers. Companies use multi-variant testing (also known as A/B testing) to present different offers to similar customers and figure out which offer has a better conversion rate. The goal of testing different messages can vary depending on what type of business you’re in. For example, publishers may use it to serve the exact content a user wants without them having to go looking for it, online stores may use the information to cross-sell and up-sell customers, while small businesses can use it simply to figure out which web page their customers respond to best.

Sites such as Amazon and Netflix are leading the way with powerful recommendation engines based on vast stores of user data. Industry experts use many terms to describe behavioral segmentation; these include psychographic segmentation, customer profiling, web personalization, and behavioral targeting. Could a business practice with this many names be right for you?

“If you think your company can benefit from segmenting your customers,” says Dr.

Amir, “then it’s worth the investment.”

 

Business Operation Trends

Trend 9: Green,The Second Act

No business can escape the need to address sustainability as it goes more and more mainstream. Soon Wal-Mart will require all products to have a sustainability rating.

“If you don’t understand green, you’d better get started,” says Vistage speaker David Houle. “Green means saving money and lowering expenses. If you believe in this, you should go green; also, your customers will be demanding it soon. Your customers are going to ask you about your total carbon output, and if you don’t have an answer, they may find a new supplier. A carbon footprint will become part of the business balance sheet in the very near future.”

But wait, things get more granular.

“More consumers will demand product footprinting—a holistic, lifecycle picture of the climate impacts of your products and services,” says Ryan Schuchard, Manager of Environmental Research and Innovation at Business for Social Responsibility.

What can you do to get ahead of the trend?  For starters, get a carbon audit performed on your company, so you know your precise carbon output when customers ask for it. If your output is less than industry standards, than make a big deal out of it; otherwise, make the number publicly available with the commitment that you’ll look for ways to start reducing it.

If you want to go a step further, get a lifecycle impact audit done on your products.

Look to your industry association to publish consensus-based standards for products in your sector. Start reducing your impact and advertise what you’re doing—it’s one competitive advantage of the future.

Trend 10: Collective Intelligence

“We are now creating a collective intelligence that will filter and respond to what’s worthwhile,” says futurist Ross Dawson.

What does collective intelligence mean for the average business owner? It’s the opportunity to distill the “wisdom of the crowd” in a quick, cost- effective manner and get solutions for your pressing business issues. Here are some examples:

• Crowdsourcing: When you broadcast a request for work you need done and people online willingly help, that’s “crowdsourcing.” For example, say you need to name a new product or want to rename your company. Go to the site namethis.com and post your request. Users of the site will offer names and vote on them. Once submissions are in, you pick the one you like best. It costs $99 to harness the crowd’s brain—significantly less than recruiting the services of a branding agency—and the money goes to the person who picked the best name. Here are 10 crowdsourcing sites explained .

 

• Freelancers on demand: “You can now access the best talent from around the globe to work on your projects,” says Dawson, who points to sites such as elance.com, odesk.com, freelancer.com and rentacoder.com. On these sites, companies can post job listings and freelancers worldwide can bid on them, usually in an auction-style format.

Caution: while this instant job bidding works well for small and non-complex tasks, it’s not always suitable for large or complicated jobs.

• “My Ideas”: Companies are now gathering the opinions, ideas and recommendations of their customers and then surfacing the most popular of those. Mystarbucksideas.com is an example of how to tap the wisdom of crowds to innovate and figure out what your customers want.

“We now have tools to quickly access the knowledge and views of a large number of people,” says Dawson. “Business leaders should think about how they can best use collective intelligence.”

Trend 11: Evolution of Traditional Sales Models

 

The traditional sales process is being disrupted and transformed by robust websites, social media, online reviews and customers who value speed and convenience in purchasing.

“For over 100 years,” says Vistage speaker Sam Bowers, “the cold call was the way the potential seller and buyer met each other and where information was shared. The salesperson educated the potential buyer about the features and benefits of the product or service. Marketing was nothing more than the support arm of the direct sales effort.”

Smart companies are no longer “selling” goods and services. In the new paradigm, customers do their research online and read user-posted reviews and then figure out what they want.

Many companies are dismantling their sales forces and replacing them with marketing teams. Some companies, says Bowers, may have to straddle the old and new sales paradigms for a while and incur double costs, as certain industries still rely on the old sales process.

“Now the process has been reversed,” says Bowers, “We attempt to get the client to come visit us. Pull marketing instead of push selling.”

So what are the elements you need to have in place to “pull in” customers? Here’s a partial list:

• A robust website that offers detailed information about your offerings

• An easy way to buy your products or services online

• Real (and honest) reviews posted on third-party sites by your customers

• Targeted ads that point to your website

• A website that is optimized for search terms

Vistage speaker Tom Searcy, founder of Hunt Big Sales, agrees with Bowers and adds that the traditional mechanisms that triggered large sales are dying quickly.

“The trade show was where you saw big equipment or large capital purchases,” says Searcy. “Trade-show attendance is down 15 to 20 percent year over year.”

“The new initiation points for big purchases take place online in places like Linkedin groups or industry-focused user groups. Now when people look for a solution, they get recommendations from peers, then they read online reviews and view videos, then they go to a company’s website. People don’t call the manufacturer first, and they don’t take cold calls.”

“As you move up in the size of expenditure and complexity of purchase,” says Searcy, “trust and credentials become key influencers. Trust used to be built over three to four presentations and dinner meetings with a sales person, but we don’t have the time for this anymore. Now the trust curve is built online.”

To create trust in the marketplace, Searcy recommends that business leaders take the following steps:

1) Capture your legends, fan base, users and products on video and put it on your website.

2) Build your credentials by actively publishing articles and white papers, blogging, speaking, and contributing to LinkedIn groups on your area of expertise.  You can also sponsor independent research and publish it. HTS RESERVED. 221_1541_021710

3) Affiliate your business with independent thought leaders. Sponsor their talks, publish their white papers, and invite them onto your board of directors or advisors.

4) Get prized certifications and credentials in your industry.

5) Partner with organizations that have market mass; for example, become an exclusive territory distributor for a big-name product or service.

“In the new sales model,” says Searcy, “thought leadership trumps personality and even relationships in generating trust. If you focus on that, you will have better opportunities coming to you.”

 

Trend 12: Constant Business Pressure

Constant business pressure, due in large part to slow growth, is a hallmark of the “new normal.” Businesses must now focus on creating products and offering services that are better, faster and cheaper than the competition.

Trend analyst and Vistage speaker Morris Segall, President of SPG Trend Advisors, notes that several factors have combined to force businesses into the “better, faster, cheaper” paradigm. Those factors include: low consumer spending, high unemployment, low growth in consumer incomes, more restrictive and expensive credit, and an aging population.

“Tight controls on cash-flow have been a requirement for operating during the recession,” says Segall, “and businesses will need to continue operating with tight controls and creative flexible business models going forward.”

Segall offers this advice for companies that need to better control cash-flow and manage the balance sheet:

•  Improve working capital by increasing asset turnover, lowering debt, and efficiently managing assets such as receivables, payables and inventory.

•  Compensate for low unit-volume sales growth and a competitive pricing environment by employing stringent cost control and planning practices.

•  Control labor costs by outsourcing, upgrading to new technology and migrating to more creative, web-based marketing and sales. Additionally, businesses can choose to do more with fewer workers by providing more extensive training, allowing them to take on more tasks.

•  Control other costs by revamping processes and distribution systems, and by partnering with other firms to share costs or augment product and service offerings.

•  Seek horizontal business opportunities to generate revenue with moderate additional capital investment.

• Use a flatter management structure (one that shortens a chain of command and relies more on a team concept) to reduce pure management expense.

• Incentivize workers to achieve individual and entity goals, thus aligning their achievements with company success.

• Improve your customer service. Going forward, first-rate customer service and customer service initiatives will define successful companies. Employers should look for workers who can be more complete, more productive and better informed in their jobs to provide great service.

“Being a more productive and efficient firm is not the entire solution,” says Segall.

To offset slower growth in traditional business lines, he suggests that companies look for opportunities in industries and sectors that have revenue growth potential. Such growth opportunities will come from:

• Healthcare and public education reforms that require technological and process revamping

• Agricultural innovation that attempts to produce more food on less arable land with less water

•  Water development and conservation to manage a shortage of potable water worldwide

•  Energy conservation technology development and expansion

•  Electric power grid and mass transit systems expansion and modernization

•  U.S. exports to fast-growing overseas economies

•  U.S. government spending and procurement increases

•  State and local government outsourcing of services

•  Government and corporate spending on worker retraining

•  Real estate rehabilitation and recycling in a shift away from traditional and more costly new development

“The new economy,” says Segall, “will require innovation, renewed commitment to customer service and solutions; and, above all, every business owner and manager will have to be an entrepreneur to steer their businesses to success.”

Vistage International hosts a membership of 14,000 CEO’s company  Presidents, Business Owners and Senior Executives. Each quarter we survey them to garner their take on the economy, their plans for hiring and capital spendign, and expansion, and their general confidence that that things will improve, or not. Rather than expecting  renewed economic downturn, the majority of CEO’s surveyed anticipated a stagnating economy–growth too slow to support robust gains in employment or investment, along with lower revenue and profits.

SOME HIGHLIGHTS

• Half of all firms are worried about data security.
• More than half of all CEO’s surveyed our holding back on permanent hires.
• More than half expect flat or declining prices
• In terms of how government can help business, the majority of respondents want government to open new markets through trade agreements.

Check out the latest results. With a sample this size, the results are worth paying attention to.

Vistage CEO Confidence Index